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A Q & A With SCAA's Ric Rhinehart, Part 2: Coffee Geekdom, The 4th Wave + Starbucks

In the first part of our interview with the Specialty Coffee Association of America's's Ric Rhinehart, Rhinehart discussed Arianna Huffington, the definition of cupping (no, it is neither a baseball nor a lingerie term), and the utterly serious question of how much coffee he drinks. Turn the page for the second part of the interview, in which Rhinehart discusses coffeegeeks, the importance of Starbucks and the coffee wave theory.

And, if you're in Anaheim for the SCAA Exposition, starting today and continuing through Sunday, you may want to stick around for round one of the United States Barista Championship, held today and tomorrow.

Squid Ink: From a layman's perspective, it seems like coffee in LA has come a long way very quickly. But it can seem pretty geeked out now sometimes, with the Clovers and siphons and what have you.

Ric Rhinehart: Well I think that coffee in Los Angeles has made a quantum leap. It was much anticipated. I was absolutely certain that we were headed in that direction you know, from 2003 onward, that there was going to be an opportunity to really push the quality envelope in Los Angeles. And so I would say, definitely there was a dramatic step forward in the accessibility of good coffee in LA. The Intelligentsia storefronts may be slightly intimidating if you've never really interfaced with that level of coffee geekdom before, but I have to say that, to the credit of the company and the staff and the dedicated baristas there, they're very engaging; they really want to show you the product.

SI: Do you think that that quantum leap is still continuing? Is it going to leap some more?

RR: Yeah, I think we're going to see people look at the Intelligentsia model in Los Angeles and do the math and say, hey, it's a big city, there's room for lots of folks. And there's other bright spots out there. You've got the folks at Lamill and Caffe Luxxe and Venice Grind and a whole range of other places. Fix Coffee, they're doing a great job there. People are stepping it up and doing really good work with coffee, so I think it will continue. You don't have to work very hard to do the math and see how much market opportunity there is there.

SI: So are we still in the Third Wave, or is this the Fourth Wave, or is the wave model sort of redundant at this point. You're laughing again.

RR: I think we're on the cusp of the next generation of coffee.

SI: Which would be the Fourth?

RR: I guess. I mean the Third Wave thing fits very nicely into the market leaders who are out there at the bleeding, cutting edge of coffee. I don't know if Fourth Wave is the right description for whatever the next generation of highly engaged coffee people will be. I think there's a confluence of world markets in coffee changing, and consumers' perceptions of food products changing in a way that will very much impact how we interact with coffee as consumers. I'm interested to see what the right response is from the coffee world. Because I think there's still a fabulous opportunity to introduce people into differentiated coffee products, coffees that smell and taste and are better than the mainstream premium or commercial offerings.

SI: So is that what you guys are wanting to do? I mean, it may be (another) stupid question, but what is the definition of Specialty Coffee?

RR: It's funny that you should ask that. That's the number one item on our agenda: to provide a meaningful definition. We as a trade have always looked at specialty coffee from the green coffee side, so we look at it as coffee that has the potential to be great. Green coffee that's free of defect, that's grown in an appropriate geography, that's properly cultivated, cared for, processed, that's presented to us as the trade consumer as a measurably good raw material. That doesn't really say anything to the consumer, because the consumer's interaction with coffee is not as green coffee, but as a beverage. So there are a lot of steps in between green coffee production and beverage production that have to be met. Our sister organization in Europe, the Specialty Coffee Association of Europe, defines specialty coffee from the cup side; they really look at it as a beverage first. So we've sort of arm wrestled around with what's more important. You can't make a silk purse out of a sow's ear, as they say. So we are wresting with that definition.

It's a critical time to do that because specialty has been so very successful. Coffee was a post-peak, fully matured market in the US, and consumption was on the decline until the specialty movement really got some traction in the mid 80s. By the mid 90s we'd reversed that trend and coffee was a growth market again, new consumers were coming into the fray, we'd re-attracted the 18-24 crowd to start drinking coffee, and coffee made a massive leap forward. The response of the marketplace was that the sort of mid-level fat part of the market started to move their quality upwards. The result is that we have words in our lexicon today: if I say barista or arabica, those are words that are in the average American's vernacular today that weren't present 15 years ago. So to that degree we've been very successful. You see the emergence of good quality coffee, much better quality than what you found on the grocery shelf 15 years ago. They're everywhere. You can get them at Dunkin' Donuts, at McDonald's, at Starbucks, you can get good quality coffees almost anywhere in almost any city in the US now. The distance between the very best and the median has narrowed.

SI: How much credit should Starbucks get for all this?

RR: Well, they certainly ought to be recognized for having a pivotal role in all this. Their ability to put out thousands of locations was critical. But the independent coffee retailers added stores at an even faster rate than Starbucks did. By 2007 there were more independent retailers than there were Starbucks stores.

SI: Culturally, it's almost as if we've gone back a few hundred years, to when the coffeehouses of Europe were a real center, a community meeting place.

RR: Yeah, I think that one of the things that [Starbucks CEO] Howard Schultz identified that was key to to Starbucks' success that was and is still true, was that we really needed a place that was not home and was not work where people could congregate. And particularly as we start to cocoon more and more -- we're here at 7 in the morning and we're working, and I work from home, and it becomes very easy to get absorbed into your cocoon in this day of electronic communication. And you can really interact with people [at coffeehouses] and chose the degree of interaction you have. For most of this century, the only other arena for that has been the bar. And alcohol, wonderful thing that it is, doesn't necessarily generate more productivity or the kind of tempered social interactions that lead us to clear thinking.

When we were at the peak of the financial crisis, in the first quarter of 2009, there were surveys that indicated fairly clearly that Americans retreated to their homes for coffee. But as we come around a year later, there's good indications that folks are going back to the coffeehouse. In general, peoples' coffee consuming habits didn't change very dramatically. Certainly the overall consumption didn't flinch; we still gave ourselves coffee every day.

SI: Yeah, in spite of the $5 latte, it's still cheaper than most things.

RR: Right. It's hard to buy a good beer in Los Angeles for less than five bucks. And then you can spend a ludicrous amount of money on wine, as my wife likes to point out to me. And you can have a safe social interaction. I've been married for so long this isn't really a concern for me, but I have lots of friends who are out in the dating world. The coffeehouse provides a great safe place to meet somebody, get to know someone. You're not drinking while you're doing it.

SI: Unless you're drinking too much coffee.

RR: That may impair your ability to stay seated, but I don't think it ruins your judgement.


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